Google is drastically scaling back its Fiber initiative because it’s too expensive – and only a fraction of the expected subscribers ponied up.
Insiders speaking to The Information suggest it had only signed up 200,000 subscribers, far short of the trajectory needed to achieve 5m in five years.
The publication also reports that CEO Larry Page has demanded that Fiber “reduce the current cost of bringing Google Fiber to customers’ homes to one-tenth the current level”
That should be interesting. Google Fiber will be scaled back to just 500 employees, half its current staffing.
But wait. Wasn’t Google “killing any doubts about its national ISP intentions” just two months ago? Sort of. From now on, Google will focus on selective wireless, rather than wireline infrastructure. It’s a lot cheaper.
The San Jose Mercury was the first to report the scale-back a fortnight ago.
Broadband requires eye-watering investments but it has never been very profitable on its own, requiring cross subsidies from telephone or media services. Google itself and other OTT players helped undermine that business case. Now Google has joined the “cord cutters” – and cut its own cord. ®